By Jeffrey Heller
JERUSALEM (Reuters) - Prime Minister Benjamin Netanyahu signaled readiness on Wednesday to consider a 2002 Arab peace plan whose terms were recently softened to include possible land swaps between Israel and the Palestinians.
"We are listening to every initiative - the Arab initiative has been mentioned - and we are prepared to discuss initiatives that are proposals and not edicts," he said in a speech in parliament.
Netanyahu spoke during a debate on the plan, proposed at an Arab League summit 11 years ago. Israel had rejected the initiative that offered normalized ties for it with much of the Arab world, citing its call for complete withdrawal from land captured in the 1967 Middle East war as a main stumbling block.
Israel occupied the West Bank, Arab East Jerusalem and the Gaza Strip, areas Palestinians seeks for a future state, in that conflict.
Echoing previous Israeli leaders, Netanyahu has ruled out a return to pre-1967 war frontiers, calling them indefensible.
But a month ago, Arab states appeared to soften the 2002 plan when Sheikh Hamad bin Jassim al-Thani, Qatar's prime minister and foreign minister, said Israel and the Palestinians could trade land rather than conform exactly to the 1967 lines.
Netanyahu, who heads the right-wing Likud party, has never endorsed the idea of territorial exchange publicly. A 2009 U.S. diplomatic cable released by Wikileaks in 2010 said he expressed support for the concept in a meeting with U.S. legislators.
In his address to the legislature, Netanyahu repeated a call to Palestinian President Mahmoud Abbas to return unconditionally to peace talks that collapsed in 2010 over continued Israeli settlement building on occupied land.
Abbas has said Israel must first stop settlement construction in the West Bank and East Jerusalem before the U.S.-hosted negotiations can resume.
"Since he (Abbas) doesn't speak Hebrew, and my Arabic is not great, I am calling on him in a language we both know and saying to him, 'Give peace a chance', Netanyahu said, switching to English to utter the phrase.
"Don't miss the opportunity," he added, saying he was prepared to make "difficult decisions to move negotiations ahead" but cautioning he would take no moves that would jeopardize Israeli security.
Abbas said on Tuesday "the ball is in the Israeli court" and Israel needed to accept the Palestinians' demand for a settlement freeze so that talks could begin.
U.S. Secretary of State John Kerry has been trying to restart the negotiations. He has made four trips to the region since taking office four months ago and a State Department spokeswoman said on Tuesday he could return to Israel and the Palestinian territories as early as next week.
(Editing by Mark Heinrich)